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Apartment Rents and Prices Tremble, but Don't Plummet

Despite dire predictions about plummeting apartment prices, and despite the bad economic news since the World Trade Center attacks, Manhattan's real estate rental and sales prices have not gone into free fall.

''While it would be ludicrous to say it is business as usual, the market does seem to be rolling along, although at a slower pace,'' said Frederick W. Peters, president of Ashforth Warburg.

Mr. Peters, along with other real estate executives, said he expected some ''downward pressure on prices'' -- price cuts -- in current deals.

Brokers said they had already seen price reductions of 10 to 15 percent on the costliest apartments before the disaster: the $8 million Fifth Avenue duplex going under contract for $7 million, for example. They added that less expensive apartments still appeared to be selling at or near the asking price, except those below Canal Street, where there was virtually no activity at all.

For the most part, closings have gone on, although there have been isolated instances of buyers walking away, effectively handing their 10 percent deposit to the sellers, who then try to sell the apartment all over again.

''We only had one person walk away,'' said Alan Rogers, chairman of Douglas Elliman, the city's largest real estate brokerage firm. ''But he left $500,000 behind.''

In general, agents say they worry most about new business, not existing deals.

''I don't think New York has seen anything like this since the mid-70's,'' Mr. Peters said. ''There's an uncertainty about what will happen next.''

Barbara Corcoran, president of the Corcoran Group (who yesterday announced the sale of her company), said she had told a roomful of shell-shocked brokers last Friday that they should tell their customers to make offers.

''I was suggesting that some buyers are so psychologically low now that they might be having a hard time buying anything,'' she said last night. ''I told them to let the buyer make an offer. Let the buyer set the market.''

But she said that rumors that prices were already down as much as 30 percent were absurd. She also said it was premature to say that the seller's market, which peaked 18 months ago, had tipped into a buyer's market, although some brokers were saying privately that it was probably true.

Meanwhile, some would-be buyers are taking advantage of the uncertainty, or are trying to. Ellen Rubin, who owns a public relations firm, said she was staying with her boyfriend in her father's Park Avenue apartment after being evacuated from her TriBeCa rental. She wants to keep looking for an apartment to buy, in the same area. ''But to be perfectly honest,'' she said, ''my first thought about apartment-hunting was, 'Now I can really get a deal.' ''

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Several agents told tales of buyers with signed contracts, which are usually binding, who approached the seller after the tragedy and tried to renegotiate the price downward. (Their threat was to walk away from the deal.)

''We had eight people trying to renegotiate last week,'' said Scott Durkin, chief operating officer of the Corcoran Group. ''And guess what? Three were successful.''

Mr. Durkin said landlords reduced the prices of 1,500 of their rental apartments -- from Upper East Side brownstones to luxury towers -- last week from $50 to $200, far more than the 400 such price reductions in the week before the attack. But executives at two of the city's largest rental agencies, Feathered Nest and CitiHabitats, questioned that figure, adding that any reductions they had seen were on apartments that were overpriced to begin with.

Andrew Heiberger, president of CitiHabitats, said that calls from people seeking apartments had been cut in half last week. But that was a lot better than the week before. After what he called ''the initial jolt,'' deals did go through.

''When the planes hit the World Trade Center, we had 300 deals in progress,'' he said. ''They disappeared for a week. Then maybe 250 re-emerged and the contracts were signed.''

Yet there are not many contracts, sales or rental, being signed downtown these days. Not surprisingly, brokers cite the shock of the attack and the neighborhood's inaccessibility. ''People are streaming out of downtown,'' said Nancy Packes, president of Feathered Nest. ''And they are going uptown. Uptown, the rental market is strong.''

While most agents say it is too soon to judge the long-term strength of Manhattan's real estate market, there was one interesting statistic from one of the city's largest mortgage brokers.

Melissa Cohn, president of Manhattan Mortgage, said that some of her business last week was people refinancing their properties because of low interest rates.

''But 15 out of 27 of those new deals were people who had just decided to buy something,'' Ms. Cohn said. ''And that surprised even me.''